Cooperative Society’s Interest Earnings from cooperative banks: Deduction u/s 80P(2)(d) Available

Mahatma Sahakari Griha Rachana Sanstha Maryadit Vs PCIT (ITAT Pune)

ITAT Pune held that interest income earned by the cooperative society from the investment with cooperative banks qualifies for deduction under section 80P(2)(d) of the Income Tax Act.

Facts- The appellant is a cooperative society formed under the Maharashtra Co-operative Societies Act, 1960. It is engaged in the business of accepting deposits from members and providing credit facilities to its members.

Post completion of assessment u/s 143(3), the Principal commissioner of Income Tax issued notice Under Section 263 of Income Tax Act after passing assessment order held that assessing officer failure to examining the taxability of interest earned on the investments made with the cooperative banks, as the same constitutes business income, which constituted the assessment order erroneous.

PCIT set aside the assessment order with a direction to examine the assessee‟s claim of deduction u/s 80P(2)(a)(i) as well as interest of Rs.19,88,77,712/- u/s 80P(2)(d) after affording reasonable opportunity of being heard to the appellant. Being aggrieved, the appellant is in appeal before us in the present appeal.

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